Equatorial Marine Fuel Mgmt. Serv. V. Misc Berhad

• Decision Date: 11 January 2010
• Docket Number: No. 08-57046.,08-57046.
• Citation: 591 F.3d 1208
• Parties: EQUATORIAL MARINE FUEL MANAGEMENT SERVICES PTE LTD., Plaintiff-Appellant, v. MISC BERHAD, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

591 F.3d 1208

EQUATORIAL MARINE FUEL MANAGEMENT SERVICES PTE LTD., Plaintiff-Appellant, v. MISC BERHAD, Defendant-Appellee.

No. 08-57046.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted July 7, 2009.

Filed January 11, 2010.

As Amended February 2, 2010.

Appeal from the United States District Court for the Central District of California, Valerie Baker Fairbank, District Judge, Presiding. D.C. No. 2:08-cv-07756-VBF-CT.

Before: ALEX KOZINSKI, Chief Judge, FERDINAND F. FERNANDEZ and N. RANDY SMITH, Circuit Judges.

ORDER

The opinion is amended to replace the last sentence on page 1210 of the opinion with the following: Finding that Equatorial failed to show it had a valid prima facie admiralty claim against MISC, the district court vacated the attachemnt.

No petitions for rehearing or rehearing en banc predicated on this amendment may be filed.

OPINION

KOZINSKI, Chief Judge:

We consider whether the district court erred in vacating a maritime attachment.

Facts

Equatorial Marine Fuel Management Services sues MISC Berhad for breach of contract and unjust enrichment. Equatorial, a supplier of marine fuel, claims MISC agreed to purchase over $22 million worth of bunker fuel—which is used to power ships—for vessels owned and operated by MISC. Equatorial delivered the bunkers to MISC through Grandeur Trading & Services, but MISC never paid Equatorial.

MISC says it never contracted with Equatorial. According to MISC, it entered into a contract with the bunker-trader Market Asia Link (MA Link) to procure bunkers for MISC. So long as MISC got its bunkers at the agreed upon price, it didn't much care who MA Link bought them from, which turned out to be Equatorial. And MISC paid MA Link for all the bunkers it received.

Unfortunately, MA Link became insolvent and never paid Equatorial. One party has to suffer the loss: Either Equatorial won't get paid or MISC will pay twice. Equatorial prefers the latter option, so it brought this suit against MISC in federal district court. In order to establish jurisdiction over MISC, Equatorial filed an ex parte application for maritime attachment of MISC's property that could be found in the district, including its ship Bunga Kasturi Lima, which the district court granted. After receiving notice of the attachment, MISC filed a motion to vacate it. Finding that Equatorial failed to show it had a valid prima facie admiralty claim against MISC, the district court vacated the attachment.

Analysis

We review the order vacating the maritime attachment for abuse of discretion, although we review any legal conclusions underpinning the order de novo. Williamson v. Recovery Ltd. P'ship, 542 F.3d 43, 48 (2d Cir.2008). Under Rule B of the Supplemental Admiralty Rules, plaintiff may attach a defendant's property if four conditions are met: (1) Plaintiff has a valid prima facie admiralty claim against the defendant; (2) defendant cannot be found within the district; (3) property of the defendant can be found within the district; and (4) there is no statutory or maritime law bar to the attachment. Aqua Stoli Shipping Ltd. v. Gardner Smith Pty Ltd., 460 F.3d 434, 445 (2d Cir.2006); see Fed.R.Civ.P., Supp. R.B. After receiving notice of the attachment, defendant may contest it under Supplemental Rule E(4)(f). Fed.R.Civ.P., Supp. R. E(4)(f). At a Rule E hearing, defendant may argue that the attachment should be vacated because plaintiff failed to meet one of the four conditions for attachment. Aqua Stoli, 460 F.3d at 445; see also Fed.R.Civ.P., Supp. R.E. advisory committee's note (1985 amends.) (explaining that at a Rule E hearing, defendant "can attack the complaint, the arrest, the security demanded, or any other alleged deficiency in the proceedings"). Plaintiff has the burden of justifying a continued attachment. Fed.R.Civ.P., Supp. R. E(4)(f).

MISC argues that Equatorial's claims aren't maritime in nature, and the district court therefore lacked admiralty jurisdiction. To determine whether Equatorial's claims sound in admiralty, we look to whether "the principal objective" of the claimed contract or dealings "is maritime commerce." Norfolk S. Ry. v. Kirby, 543 U.S. 14, 25, 125 S.Ct. 385, 160 L.Ed.2d 283 (2004). Here, Equatorial's claim is that it supplied bunkers to MISC's ships, and regardless of whether this fuel was delivered by a third party, the alleged dealings are clearly maritime in nature. See Exxon Corp. v. Cent. Gulf Lines, Inc., 500 U.S. 603, 612-13, 111 S.Ct. 2071, 114 L.Ed.2d 649 (1991). Thus, the district court properly exercised admiralty jurisdiction over Equatorial's claims.

Nevertheless, the district court properly vacated the attachment because Equatorial failed to show it had a valid prima facie breach of contract or unjust enrichment claim against MISC. As to Equatorial's breach of contract claim, Equatorial failed to show it had a contract with MISC. Equatorial's verified complaint alleges that MISC "agreed" to each sale and delivery of fuel by Equatorial and "accepted and used" that fuel. MISC, however, denied this allegation and presented evidence that it contracted only with MA Link—including a copy of its contract with and documentation of its payments to MA Link.

To contradict MISC's evidence, Equatorial relies on the documents attached to its complaint and its response to the motion to vacate: letters from MA Link to Compass Marine Fuels (a bunker broker used by Equatorial) showing MISC as the "buyer" and Equatorial as the "seller"; invoices from Compass to Equatorial listing MISC as the "buyer" and Equatorial as the "seller"; bunker...